Practical market research explained
Is market research necessary or is it an expense a company can do without?
We asked Raul Juan Esteban, managing director of marketing research firm PSRC, for some answers.
Esteban is a valuable source of information given his experience in market research.
He is past president of the Marketing and Opinion Research Society (MORES) of the Philippines; country representative of ESOMAR, the global research association; and past chair of AGB-Nielsen.
Here, he also shares his insights into doing research the practical way.
Q: Why should companies do market research?
A: As a marketing researcher, I’m of the firm opinion that the discipline can help out in any stage of the marketing management process, from market understanding, target selection, marketing mix development, and managing the implementation and yes, even on innovation.
It can be an aid to making decisions on a wide variety of marketing issues and problems in the product life cycle… from product birth to death or from brand conception to resurrection.
It is rare though for a marketing man to conduct MR at each and every stage. One has to be purposeful when deciding to use MR.
It is usually best used during times of marketing blind spots, such as in circumstances with fast evolving consumers, higher competitive risks, uncertainties in the marketplace.
Consumer revelations can drive one’s business efforts forward.
Q: What key questions should a startup brand or company be able to answer in their market research?
A: In the Philippines, many startup entrepreneurs have a pretty firm, sometimes even unyielding, idea of the product they want to offer. They probably even have their own idea of how to communicate and sell. But only a few have considerable information about the market they want to serve leading to many possible business queries:
- Target market selection. Who best to offer to? Possible are the more likely early adopters?
- Market and product fit. Will people like my products or service? Do I add any value?
- Sustainability. Do I serve a particular market need or fill up a gap in the marketplace?
- Competitive positioning. How different am I from others?
- Viability. What is the market/category size? How big a share can I reasonably capture?
I find it useful to have an adequate understanding of the primary need/s of a marketing person for me to determine how best to assist. For instance, would he require:
- Opportunity identification
Q: What practical market research tools can you recommend if firms want to implement Do-It-Yourself (DIY) Market Research and why?
A: First I would need to address the issue of when to do DIY. Regardless of what you DIY, the main motive is to save money. So I guess if you don’t have much to do and have a fair level of research know-how, then it may indeed be ok to consider DIY marketing research. The other side of the coin, which is usually less thought about, is to evaluate how much ‘more’ money (or benefit) you would have if you had a specialist do something than to DIY. After all, MR is an investment not just an expense. Deciding then to DIY, or not to DIY, requires some estimation on Cost-Benefit (or Benefit-Cost).
Assuming you do intend to do DIY, perhaps it may be prudent to do less of the bigger, more complicated, statistically definitive (which require more sampling rigor) research activities. The easiest to do would be more qualitative approaches such as in-depth interviews, FGDs, consumer immersions, observations. If you require some ‘numbers,’ and when appropriate, maybe use online platforms/panels or do quick/small sample intercept interviews, etc.
These DIY projects may be not as robust, but they can give you a more personal, even face-to-face, encounter with consumer behavior and attitudes.
Q: The failure rate of new products is quite high, even for multinational companies doing market research. What should marketers and entrepreneurs watch out for to reduce the chances of failure after doing market research?
A: Some things I realized early in my MR career are:
Many companies have been successful even without marketing research.
The presence of market research does not guarantee success.
What’s even more humbling is to find out that the former beats the latter. It’s easy then to be cynical about the real ROI of market research. After all, success depends on an array of factors, many of which may be situational, organizational or execution related.
Marketing research is just a tool to reduce risk, not a magic bullet.
But companies do try to maximize what they can benefit from it.
For instance, traditionally, the role of the client marketing research professional was simply to oversee the conduct and outsourcing of MR activities. Today we see an increasing trend in expanding the focus of these people to more insights generation, business intelligence and strategic planning. Concurrently, job titles have been transforming to include labels such as consumer insight, market intelligence, customer analytics, knowledge managers. These days the broader job description includes an expectation of ensuring that the information become more profound and that the learnings permeate a wider audience within the organization. —CONTRIBUTED
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